Defying expectations, global LCD TV market rises in first half

A new report from IHS Technology reveals an unexpected growth in sales
of LCD TV panels in the first half of this year, which is linked primarily to
the World Cup.

Global LCD TV panel shipments during the first six months of 2014 rose 3
percent from the same period a year ago. Although growth this year was much
less than the 9 percent expansion logged during the first six months of 2013,
achieving any increase at all was surprising to industry watchers.

According to Ricky Park, director for large displays
at IHS, the television industry was doubtful about any increase in shipments
during this period, considering the discouraging market indications earlier in
the year.

Among the variables driving the sales, the World Cup received the most
credit, with the event boosting demand for televisions, especially in Europe
and South America. Sports extravaganzas have long been reliable drivers of
television sales, and by extension, the LCD TV panels that make up the sets.

In addition to the sporting event, various other factors also kicked in,
helping to create an overall favourable environment for the global LCD TV trade
in the first half of 2014. These included signs of a continuing economic
recovery in North America, one of the world’s two largest markets for LCD TVs
alongside China; a subsidy program initiated by the Mexican government for its
citizens to buy new LCD TVs; and the continued phasing out of bulky, tube-type analogue
televisions, now obsolete in many areas of the world.

Strong demand blunted by
production problems

Despite the stronger-than-expected demand for the January to June
period, a drop in yields and a loss in capacity due to production line
modifications caused a shortage of supply of LCD TVs. The effects were felt
especially in the ultra-high-definition television (UHD TV) segment of the
industry. With four times the resolution of 1080p sets, UHD TVs are priced far
higher than conventional high-definition television models.

The production method known as multi-model on a glass (MMG) also faced low
production efficiencies resulting in reduced capacity, especially in the
advanced production lines for eighth-generation fabs.

IHS believes production issues of a different nature are likely to occur
in the second half, extending current manufacturing woes. A substantial loss in
production capacity is expected during the remainder of the year because panel
makers in China and Taiwan are slated to use different electrode materials from
those currently deployed, ostensibly to improve their UHD products.

Change afoot at Korean suppliers
Samsung Display and LG Display

Samsung Display will reduce the thickness of its front-pane glass to 0.5mm
as the company increases the production of curved TVs. LG Display is converting
part of an eighth-generation line to oxide thin-film transistor technology to
produce OLED panels, a rival technology to UHD LCDs that the maker hopes will
start picking up among consumers.

TV prices are not expected to dip in the coming months in spite of the
ongoing production problems, which will serve to constrict the supply of LCD
TVs.

These findings are available in the report titled, ‘LCD Supply and
Demand Market Tracker – Q2 2014’ from the Displays service of IHS Technology.

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